Mortgages made available for on-reserve housing

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A new program developed by the Bank of Montreal will help Aboriginals access mortgages to build houses on their reserves, a first in Canada.

A pilot project launched in Akwesasne is aimed at reserve residents who are employed, have a good credit history and want to build a house on reserve land.

Previously, banks did not make real estate loans for building on reserves because they could not foreclose on the property, since land cannot be owned by anyone other than a member of that community, said Ron Jamieson, vice-president of Aboriginal Banking for the Bank of Montreal.

"The bank has no security, and the bank won't make a loan," Jamieson said.

The way around this is to appoint three trustees, all highly respected members of the community. Ownership of the real estate is transferred to the trustees, who arrange the mortgage with the bank.

If the borrower meets the loan obligations and pays the mortgage off, ownership of the land and housing is transferred back to him.

If the borrower defaults on the mortgage, the trustees can sell the land and building to another member of the community.

"It never leaves the ownership of the reserve members," Jamieson explained.

Akwesasne accepted the bank's proposal in May and six applications are waiting for approval, expected Aug. 1, said Phyllis Lazore, Director of Mohawk Council Department of Housing. Another 100 applications are expected with the first two months.

Loans available through other programs now total $19,080 for housing and $8,500 for septic tanks and power lines, Lazore added.

"All we're building is shells, really," she said.

The contrast between the Canadian side of Akwesasne and the U.S. side is particularly noticeable because on the U.S. side, residents get complete houses built through HUD.

In order to be eligible, the reserve must operate on a Certificate of Possession basis, with identifiable lots surveyed. About one-third of the reserves in Canada operate on this basis. If reserves hold the land in common, the program won't work.

On Akwesasne, one-acre serviced lots sell for around $3,000 Lazore said. At one time, if people couldn't afford to buy land, lots were taken out of common land, held by all the residents, and allotted to an individual. That land is almost used up.

The need for on-reserve housing is acute. Akwesasne's population is around 10,000 and the waiting list for houses now is 145, Lazore said.

In Ontario, there's a 9,000 home backlog, Jamieson said, and approximately 25,000 houses are needed nationally.

Lazore is one of the estimated 60 per cent of people on Akwesasne who could afford to mortgage under the new program, but she isn't willing to risk her land. All band members will be fully aware of their responsibilities and the risks involved before a mortgage is granted, she added.

The Mohawk Council is faced with a high delinquency rate on housing loans now, Lazore added, and they are working on a delinquent policy which will help people who lose their jobs or suddenly find themselves unable to afford their mortgage payments.

They are also looking at ways to help people who can't afford a mortgage get into houses, so no one is neglected.